Key Takeaways from the AMCP Summit: Perspectives on Value-Based Arrangements and Assessments
On Nov. 9, 2022, I had the pleasure of moderating the AMCP Summit on value-based arrangements. The main goals were to discuss the evolution of value-based models, explain the different value framework models and their utilization in managed care practice, and provide best practices for utilizing value-based contracts in a managed care setting.
A few key takeaways I heard from the summit include:
- Our health care financing systems were not designed for optimizing value or handling certain high-investment interventions.
- Current and evolving value assessment frameworks are designed for different target audiences; each has pros and cons for different decision- and policy-making applications.
- Cumulative experience to date has yielded well-established principles and emerging best practices in value-based contracting.
- Drawing in part on principles of value-based assessment, The Inflation Reduction Act has the potential for unintended as well as intended downstream impacts on innovation, access, and spending.
- Specialty pharmacy and generic pharmacy increasingly operate in different worlds of value-based care.
- To achieve the agreed-upon goal of value-based care, key stakeholders must align through partnerships and other means as demonstrated in various models throughout the U.S.
For a more detailed recap, take a look at the following information.
Five Forces Shaping Value-Based Care
In the opening keynote, Amitabh Chandra of the Harvard Kennedy School and Harvard Business School wove together five forces shaping value-based care: 1) the growth of public payers contributing to arbitrary plan design throughout the U.S., 2) parallel use of cost-sharing by private plans, helping to 3) motivating The Inflation Reduction Act and movement toward price regulation, 4) offset in part by ability of payers to value cures, 5) encouraged by innovation in enabling technologies.
Using Value Frameworks
Kimberly Westrich of Xcenda led the session on best practices in assessing value and the future of value frameworks by highlighting five frameworks appearing since 2015: the Institute for Clinical and Economic Review (ICER) Value Assessment Framework, National Comprehensive Cancer Network (NCCN) Evidence Blocks, American Society of Clinical Oncology (ASCO) Value Framework, Drug Pricing Lab Drug Abacus, and Innovation and Value Initiative (IVI) Open Source Value Model. These five frameworks have direct or indirect roles in influencing access and payment for pharmaceuticals.
Based on independent research and survey data, she demonstrated how these frameworks differ by primary audiences, services assessed, and content and format of their outputs. Further, she presented a summary of the pros and cons of each framework. According to surveyed payers, the most important factors regarding the utility of the frameworks are: metrics and outcomes used, comparative clinical effectiveness information, methodologic rigor, and transparency. Payers expressed that the ICER and NCCN assessments are the most useful for formulary decisions.
Assessing Drug Value
Drawing on MassHealth’s practical experience in contract negotiations with drug manufacturers, Kimberly Lenz outlined several approaches to assessing drug value, including reference-based pricing, economic impact analysis, cost avoidance, and cost-effectiveness analysis. Based on the pros and cons of value-based contracts and managing challenges in VBCs, she set forth practical principles for contract negotiations with drug manufacturers, among which is to beware of contracts with contingencies that would put the health plan and members at odds with consensus guidelines and best practices.
Patient-Centered Value Framework
Brian O’Mahony of the Irish Haemophilia Society shared a patient-centered value framework developed for the specific condition of hemophilia. This three-tiered framework covers aspects of health status achieved or retained, process of recovery, and sustainability of health. Further, Brian demonstrated how the framework has been used to assess the value of emerging therapies for hemophilia and to present these findings to policymakers.
Value Frameworks and the Inflation Reduction Act
Randy Burkholder of PhRMA scrutinized value frameworks in the current political context, particularly regarding The Inflation Reduction Act and downstream effects on innovation and access. Focusing on the IRA’s “maximum fair price” provision, he expressed concerns about the implications of potentially unclear standards for outcomes, comparator selection, types of acceptable evidence, definition of costs, subgroups, and definition of unmet medical needs.
Evolving Strategies to Cover High-Investment Medications
Jane Barlow of Real Endpoints kicked off the session on evolving strategies to cover high-investment medications with an analysis of the expanding pipeline of gene and cell therapies and the challenges they pose to conventional payment systems. In addition to presenting a taxonomy of alternative financing designs, she shared survey results from payers and life sciences companies on their experiences and expectations for high-investment medications. Among the findings are that payers and industry are aligned in favoring performance-based outcomes contracts, the primary goals for implementing value-based agreements are less aligned, and certain hurdles remain for performance metrics, administration, and mobility of beneficiaries.
Responding panelist Ronda Copher of Bristol-Myers Squibb delved further into the pros and cons of these arrangements and the conditions under which they could enable evidence-based innovation and early patient access.
Mehb Khoja of BCS Financial brought an actuarial perspective to the factors that key stakeholders consider when managing financial risk, particularly why and when small or large employers seek stop loss and reinsurance coverage to manage financial risks posed by costly therapies for serious, low-prevalence diseases among their beneficiary populations.
Gail Ryan of Point32Health shared the perspectives of a major health plan that has substantial experience with performance-based and other financing designs, highlighting the importance of weighing key considerations such as unit cost, disease prevalence, clinical uncertainties at market entry, therapeutic durability, and potential budget impact.
Innovations in Value-Based Partnerships for Patient-Care Services
Leading off the session on innovations in value-based partnerships for patient-care services, Troy Trygstad of CPESN USA used trend data for specialty vs. traditional drug spending to demonstrate the emergence of “two separate pharmacy worlds.” He asserted that, for value-based contracting, spending and outcomes are dominated by drug product, while spending and outcomes are dominated by care delivery models in generic pharmacy. Further, he described the evolution of CPESN network arrangements with payers in the “marketplace of outcomes.”
Brenden O’Hara of Blue Cross North Carolina shared a multi-layer program of provider engagement pharmacy initiatives with 12 hospitals and 800 independent primary care practices, including a series of meetings to gain partner buy-in, focus on cost of care, and determine how to attribute program impact.
Todd Sorensen of the University of Minnesota documented the magnitude of lost value in ineffective medication programs and practices arising from disconnects in patient indications, dosing and other aspects of effectiveness, safety, and adherence. He described how value-based payment strategies can align with contemporary comprehensive medication management to achieve optimal drug selection and utilization, achieving greater value in the medical benefit.
From learning that our health care financing systems needed to be designed for optimizing value to discussing the need for key stakeholders to align through partnerships to ensure value-based care, the AMCP Summit offered a full set of valuable takeaways.
If you would like to attend a future virtual AMCP Summit, mark your calendar for June 1, when AMCP will conduct another summit on digital therapeutics.